Robert A. Stanger & Company has reported that sales of non-traded REITs topped $3.2 billion in the third quarter of 2019, up 25 percent over last quarter, and 179 percent over third quarter of 2018 sales of $1.1 billion. Year-to-date fundraising of $7.6 billion is up 137 percent over the same period 2018 total of $3.2 billion.
“Stanger is now projecting that non-traded REITs will raise $10 billion in 2019, up from our prior projection of $8 billion, and total sales of $4.6 billion in 2018,” said Kevin Gannon, Stanger chairman and chief executive officer.
NAV REITs (perpetual entities that offer limited periodic liquidity at net asset value) have raised $6.9 billion in 2019 through September, up 180 percent from the same period of 2018.
Lifecyle REITs (entities anticipating a five to seven year holding cycle followed by a liquidity event) contributed $680 million, down 8 percent from the same period last year.
Blackstone Group leads capital formation in 2019, raising more than $5.5 billion through September. Starwood Capital is also gaining traction with $514 million year to date. Other year-to-date top fundraisers include Black Creek Group ($346 million), Hines Interests ($309 million), and LaSalle Investment Management ($285 million).
Stanger’s survey of top sponsors of alternative investments revealed more than $16.1 billion in funds were raised through September via the retail pipeline. Alternative investments included in the survey are publicly-registered non- traded REITs, non-traded business development companies, interval funds, non-traded preferred stock of traded REITs, as well as Delaware statutory trusts and private placement offerings.
Stanger estimates that fundraising will exceed $21 billion across these alternative investments, up more than 50 percent from 2018 levels.
The top alternative investment sponsors identified by Stanger are as follows: Blackstone Group ($5.6 billion), Griffin Capital ($1.5 billion), Bluerock Capital ($1.1 billion), Inland Real Estate ($746 million), Owl Rock Capital ($709 million), Starwood Capital ($514 million), Bridge Investment Group ($509 million), Black Creek Group ($493 million), Hines Interest ($470 million), LaSalle Investment Management ($285 millions), Broadstone Real Estate ($277 million), CION Investments ($248 million), and Passco ($244 million).
Stanger attributes the growth in capital formation by alternative investments sponsors to the strong desire by retail and institutional investors to allocate capital to income-oriented real estate and investments that are not directly correlated to the public equity markets while investing under the direction of well-regarded institutional asset managers.
“Stanger expects this trend to continue for the foreseeable future,” noted Gannon.
Robert A. Stanger & Co, founded in 1978, is a nationally recognized investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations and consolidations.
Stanger is also known for its flagship publication, The Stanger Report, a newsletter focused on direct participation program and non-traded REIT investing; The Stanger Market Pulse, focused on public DPP, non-traded REIT and non-traded BDC sales; The IPA/Stanger Monitor, focusing on non-traded REIT performance, The Stanger Interval Fund Report, focusing on non-traded interval fund investing, and The Stanger Digest, a newsletter providing a weekly update on industry activities.